{"id":1709,"date":"2024-03-28T22:49:33","date_gmt":"2024-03-28T17:19:33","guid":{"rendered":"https:\/\/lotusarise.com\/qna\/?p=1709"},"modified":"2024-04-03T07:16:18","modified_gmt":"2024-04-03T01:46:18","slug":"q-with-reference-to-the-indian-economy-consider-the-following-statements-4","status":"publish","type":"post","link":"https:\/\/lotusarise.com\/qna\/upsc\/q-with-reference-to-the-indian-economy-consider-the-following-statements-4","title":{"rendered":"Q. With reference to the Indian economy, consider the following statements :"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">(1) Commercial Paper is a short-term unsecured promissory note.<br>(2) Certificate of Deposit is a long-term Instrument&nbsp;<strong>issued by RBI&nbsp;<\/strong>to a corporation.<br>(3) \u2018Call Money\u2019 is short-term finance used for interbank transactions.<br>(4) \u201cZero-Coupon Bonds\u2019 are the&nbsp;<strong>interest-bearing<\/strong>&nbsp;short-term bonds issued by the Scheduled Commercial Banks to corporations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Which of the statements given above is\/are&nbsp;<strong>correct<\/strong>?<\/p>\n\n\n\n<ul class=\"mcq wp-block-list\">\n<li>1 and 2 only<\/li>\n\n\n\n<li>4 only<\/li>\n\n\n\n<li>1 and 3 only<\/li>\n\n\n\n<li>2, 3 and 4 only<\/li>\n<\/ul>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><strong>Answer: (c) 1 and 3 only<\/strong><\/p>\n<\/blockquote>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"notes-hd-660526c18030c\">Notes:<\/h5>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Commercial Paper (CP) is an&nbsp;<strong>unsecured money market instrument&nbsp;<\/strong>issued in the form of a promissory note and held in a materialized form through any of the depositories approved by and registered with SEBI.<\/li>\n\n\n\n<li>Certificates of Deposits are fixed-income financial instruments generally<strong>&nbsp;issued by commercial banks to individuals\/ other lenders.<\/strong><\/li>\n\n\n\n<li><strong>Call money&nbsp;is any type of short-term<\/strong>, interest-earning financial loan that the borrower has to pay back immediately whenever the lender demands it.\n<ul class=\"wp-block-list\">\n<li><strong>Call money<\/strong>\u00a0deals with\u00a0<strong>day to day<\/strong>\u00a0cash requirement of banks.\n<ul class=\"wp-block-list\">\n<li>Participants in the call money market are banks and related entities specified by the RBI.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Notice money<\/strong>&nbsp;deals with loans for&nbsp;<strong>2-14 days&nbsp;<\/strong>to banks, it is also a short-term financial instrument.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Zero-coupon bond (Also known as Pure Discount Bond or Accrual Bond) refers to those bonds that are<strong>&nbsp;issued at a discount to its par value and make no periodic interest payment (noninterest-bearing)<\/strong>, unlike a normal coupon-bearing bond. Zero Coupon Bonds are not interest-bearing instead they are issued at deep discounts and redeemable at par on a future date.<\/li>\n<\/ul>\n\n\n\n<h6 class=\"wp-block-heading\" id=\"money-market--capital-market\">Money Market &amp; Capital Market<\/h6>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>The money market<\/strong>\u00a0is the centre\u00a0for dealing mainly of\u00a0<strong>short character,<\/strong>\u00a0in monetary assets; it meets the short-term requirements of borrowers and provides liquidity or cash to the lenders.\n<ul class=\"wp-block-list\">\n<li><strong>Money market<\/strong>&nbsp;deals in financial assets whose period of maturity is up to one year.<\/li>\n\n\n\n<li><strong>Short term financial instruments<\/strong>\u00a0are \u2013\n<ul class=\"wp-block-list\">\n<li>Call&nbsp;money, Notice Money<\/li>\n\n\n\n<li>Treasury Bill<\/li>\n\n\n\n<li>Commercial Paper<\/li>\n\n\n\n<li>Deposit Certificates<\/li>\n\n\n\n<li>Trade bill<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>The capital market&nbsp;<\/strong>is the market for\u00a0<strong>medium and long-term funds<\/strong>.\n<ul class=\"wp-block-list\">\n<li><strong>Capital Market<\/strong>&nbsp;deals in financial assets whose period of maturity more than one year.<\/li>\n\n\n\n<li><strong>Long term financial instruments<\/strong>\u00a0are-\n<ul class=\"wp-block-list\">\n<li><strong>Security Market<\/strong>\u2013 Equity, Debt, IPOs, Commodity Markets etc.<\/li>\n\n\n\n<li><strong>Non-Securit Market<\/strong>&nbsp;\u2013 Mutual Funds, Fixed Deposits, Saving Deposits etc.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>(1) Commercial Paper is a short-term unsecured promissory note.(2) Certificate of Deposit is a long-term Instrument&nbsp;issued by RBI&nbsp;to a corporation.(3) \u2018Call Money\u2019 is short-term finance used for interbank transactions.(4) \u201cZero-Coupon Bonds\u2019 are the&nbsp;interest-bearing&nbsp;short-term bonds issued by the Scheduled Commercial Banks to corporations. Which of the statements given above is\/are&nbsp;correct? Answer: (c) 1 and 3 only&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[1,3],"tags":[38],"years":[53],"class_list":["post-1709","post","type-post","status-publish","format-standard","hentry","category-upsc","category-prelims","tag-indian-economy","years-53"],"acf":[],"taxonomy_info":{"category":[{"value":1,"label":"UPSC"},{"value":3,"label":"Prelims"}],"post_tag":[{"value":38,"label":"Indian Economy"}],"years":[{"value":53,"label":"2020"}]},"featured_image_src_large":false,"author_info":{"display_name":"LotusArise","author_link":"https:\/\/lotusarise.com\/qna\/author\/team-lotusarise"},"comment_info":0,"category_info":[{"term_id":1,"name":"UPSC","slug":"upsc","term_group":0,"term_taxonomy_id":1,"taxonomy":"category","description":"","parent":0,"count":1269,"filter":"raw","cat_ID":1,"category_count":1269,"category_description":"","cat_name":"UPSC","category_nicename":"upsc","category_parent":0},{"term_id":3,"name":"Prelims","slug":"prelims","term_group":0,"term_taxonomy_id":3,"taxonomy":"category","description":"","parent":1,"count":1251,"filter":"raw","cat_ID":3,"category_count":1251,"category_description":"","cat_name":"Prelims","category_nicename":"prelims","category_parent":1}],"tag_info":[{"term_id":38,"name":"Indian Economy","slug":"indian-economy","term_group":0,"term_taxonomy_id":38,"taxonomy":"post_tag","description":"","parent":0,"count":225,"filter":"raw"}],"_links":{"self":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1709","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/comments?post=1709"}],"version-history":[{"count":0,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1709\/revisions"}],"wp:attachment":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/media?parent=1709"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/categories?post=1709"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/tags?post=1709"},{"taxonomy":"years","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/years?post=1709"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}